Honda Motor Co., which gets about 80 percent of sales
abroad, added 1 percent, after rising as much as 1.9 percent and
dropping 0.4 percent as the yen fluctuated. Hitachi Construction
Machinery Co. added 1.2 percent after net income jumped 56
percent. Denso Corp., a maker of electronic parts for cars,
closed little changed after sinking as much as 3.8 percent on
saying its profit forecast missed estimates.

The Topix rose 0.4 percent to 1,169.99 at the close in
Tokyo, paring gains of as much as 1.1 percent in the afternoon
as the yen erased losses spurred by the inflation data. The
gauge slid 0.3 percent this week. The Nikkei 225 Stock Average
added 0.2 percent today to 14,429.26.

“The inflation data has helped shape the path toward
additional easing,” said Tomomi Yamashita, who helps oversee
the equivalent of $5 billion at Shinkin Asset Management Co. in
Tokyo. “If you remove the effects of the sales-tax increase, it
hasn’t really increased much. The yen weakening on expectations
for extra easing is also a tailwind for Japanese shares.”

Consumer prices excluding fresh food in Tokyo rose 2.7
percent from a year earlier in April, pumped up by a sales-tax
increase at the start of the month. The figure was less than the
2.8 percent median estimate of 27 economists surveyed by
Bloomberg News. Nationally, the equivalent gauge climbed 1.3
percent in March, the same as the previous month, statistics
bureau data showed today. Analysts polled by Bloomberg had
expected an increase of 1.4 percent.

Stimulus Speculation

“Today’s CPI was a little below consensus, which increased
expectations for additional easing,” said Soichiro Monji, chief
strategist at Tokyo-based Daiwa SB Investments Ltd. “During the
break, Denso reported earnings that were worse than expected. If
it isn’t just an issue with them, it could have an effect on
other companies in the sector. But earnings are mixed overall.”

Denso shrugged off a decline of as much as 3.8 percent to
close little changed at 4,794 yen. The company forecast net
income of 248 billion yen for the current fiscal year, missing
estimates for 295.7 billion yen in profit.

About 160 companies on the Topix reported earnings this
week, with more than 200 poised to do so next week. Of the 158
companies on the gauge that posted results and for which
Bloomberg has estimates, 58 percent beat analyst predictions for
sales.

Yen Swings

The Topix opened lower today after the yen gained against
the dollar amid mounting haven demand as tensions escalated in
Ukraine. The gauge swung to a gain in the morning session as the
Japanese currency weakened after the inflation data. The Topix
pared its advance in the afternoon as the yen recouped losses.

Russian President Vladimir Putin warned Ukraine against
continuing an anti-separatist offensive. The agreement to disarm
rebels signed last week in Geneva by Ukraine, Russia, the
European Union and the U.S. is on the brink of collapse. U.S.
Secretary of State John Kerry cautioned that Russia was running
out of time to comply with the accord, as Russian forces began
new military exercises on the border of Ukraine.

“It seems that Russia has not taken a single concrete
step,” said Stuart Beavis, head of institutional equity
derivatives at Vantage Capital Markets in Hong Kong. “The
window is closing and, as Kerry said, the U.S. is ready to act.
The situation is getting increasingly tense.”

Tech Rally

Futures on the Standard & Poor’s 500 Index slipped 0.1
percent today. The measure closed near a record yesterday as
technology companies rallied after Apple Inc. results topped
estimates to offset a slump in phone shares.

Nissan Chemical Industries Ltd. climbed 3.2 percent to
1,580 yen on a report the company and Kyoto University developed
a way to cultivate induced pluripotent stem cells.

Terumo Corp. sank 5.3 percent to 1,982 yen after a U.S.
regulator said the medical-equipment maker needs further
improvements at a factory in Michigan.

The Topix traded at 1.15 times book value today, compared
with 2.64 for the S&P 500 and 1.89 for the Stoxx Europe 600
Index yesterday. Volume on the Japanese gauge was 2.1 percent
lower than the 30-day average today.